<PAGE>
Filed pursuant to Rule 424(b)(2)
SEC File No. 33-64105
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 17, 1995)
$200,000,000
Columbia/HCA Healthcare Corporation
7.25% NOTES DUE 2008
----------------
Interest payable May 20 and November 20
----------------
THE NOTES MAY NOT BE REDEEMED BY THE COMPANY PRIOR TO MATURITY. THE NOTES
WILL BE REPRESENTED BY A GLOBAL SECURITY REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY OR ITS NOMINEE (THE "DEPOSITARY"). BENEFICIAL
INTERESTS IN THE GLOBAL SECURITY WILL BE SHOWN ON, AND TRANSFERS
THEREOF WILL BE EFFECTED THROUGH, RECORDS MAINTAINED BY THE
DEPOSITARY OR ITS PARTICIPANTS. EXCEPT AS DESCRIBED HEREIN, NOTES
IN DEFINITIVE FORM WILL NOT BE ISSUED. SEE "DESCRIPTION OF THE
NOTES."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMI-
NAL OFFENSE.
----------------
PRICE 99.980% AND ACCRUED INTEREST, IF ANY
----------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNT AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
--------- -------------- -------------
<S> <C> <C> <C>
Per Note......................... 99.980% .675% 99.305%
Total............................ $199,960,000 $1,350,000 $198,610,000
</TABLE>
- --------
(1) Plus accrued interest, if any, from May 20, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated at $125,000.
----------------
The Notes are offered, subject to prior sale, when, as and if accepted by
the Underwriters and subject to approval of certain legal matters by Jenkens &
Gilchrist, a Professional Corporation, counsel for the Underwriters. It is
expected that delivery of the Notes will be made on or about May 20, 1996
through the book-entry facilities of the Depositary against payment therefor
in immediately available funds.
----------------
MORGAN STANLEY & CO.
Incorporated
CS FIRST BOSTON
LEHMAN BROTHERS
J.P. MORGAN & CO.
May 15, 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO PERSON IS AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS OR ANY DEALER
TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN SO AUTHORIZED. NEITHER THIS PROSPECTUS
SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS CONSTITUTES AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS OR ANY
SALE MADE HEREUNDER DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE ON WHICH SUCH
INFORMATION IS GIVEN.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Description of the Notes................................................... S-3
Underwriting............................................................... S-5
<CAPTION>
PROSPECTUS
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Information by Reference.......................... 2
The Company................................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Use of Proceeds............................................................ 3
Description of the Debt Securities......................................... 4
Plan of Distribution....................................................... 11
Legal Opinions............................................................. 11
Experts.................................................................... 12
</TABLE>
S-2
<PAGE>
DESCRIPTION OF THE NOTES
The 7.25% Notes Due 2008 (the "Notes") offered hereby will be issued under
an Indenture, dated as of December 15, 1993, between the Company and The First
National Bank of Chicago, as Trustee, as supplemented from time to time (the
"Indenture"). The form of the Indenture is filed as an exhibit to the
Registration Statement of which the accompanying Prospectus is a part. The
following summary of certain provisions of the Indenture and of the Notes
(referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the summaries
of certain provisions of the Debt Securities set forth in the accompanying
Prospectus, to which reference is hereby made. Such summary does not purport
to be complete and is subject to, and is qualified in its entirety by
reference to, all provisions of the Indenture, including the definitions
therein of certain terms.
The Notes offered hereby will be limited to $200,000,000 aggregate principal
amount and will mature on May 20, 2008. The Notes will bear interest at the
rate per annum shown on the cover of this Prospectus Supplement, computed on
the basis of a 360-day year of twelve 30-day months, from May 20, 1996 or from
the most recent interest payment date to which interest has been paid or
provided for, payable semiannually on May 20 and November 20 of each year,
beginning on November 20, 1996. Interest payable on any Note that is
punctually paid or duly provided for on any interest payment date shall be
paid to the person in whose name such Note is registered at the close of
business on May 1 and November 1, as the case may be, preceding such interest
payment date. Payment of interest may be made at the option of the Company by
checks mailed to the registered holders of the Notes.
The Notes are not redeemable by the Company prior to maturity. The Notes
will be subject to defeasance and covenant defeasance as provided in the
accompanying Prospectus.
The Notes will be issued in book-entry form only.
BOOK-ENTRY SYSTEM
The Depository Trust Company, New York, New York, will act as depositary
(the "Depositary") for the Notes. The Notes will be represented by one or more
Global Securities registered in the name of Cede & Co., the nominee of the
Depositary. The provisions described under "Description of the Debt
Securities -- Book-Entry System" in the Prospectus will be applicable to the
Notes. Accordingly, beneficial interests in the Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
United States Securities Exchange Act of 1934, as amended. The Depositary
holds securities that its participants ("Direct Participants") deposit with
the Depositary. The Depositary also facilitates the settlement among Direct
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
such Direct Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers (including the Underwriters), banks, trust companies,
clearing corporations and certain other organizations. The Depositary is owned
by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the Depositary's book-entry system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Direct and Indirect
Participants are on file with the United States Securities and Exchange
Commission.
S-3
<PAGE>
Principal and interest payments on the Notes registered in the name of the
Depositary's nominee will be made in immediately available funds to the
Depositary's nominees as the registered owner of the Global Securities. Under
the terms of the Notes, the Company and the Trustee will treat the persons in
whose names the Notes are registered as the owners of such Notes for the
purpose of receiving payment of principal and interest on such securities and
for all other purposes whatsoever. Therefore, neither the Company, the Trustee
nor any paying agent has any direct responsibility or liability for the
payment of principal or interest on the Global Securities to owners of
beneficial interests in the Global Securities. The Depositary has advised the
Company and the Trustee that its current practice is, upon receipt of any
payment of principal or interest, to credit Direct Participants' accounts on
the payment date in accordance with their respective holdings of beneficial
interests in the Global Securities as shown on the Depositary's records,
unless the Depositary has reason to believe that it will not receive payment
on the payment date. Payments by Direct and Indirect Participants to owners of
beneficial interests in the Global Securities will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Direct and Indirect Participants and not of
the Depositary, the Trustee, or the Company, subject to any statutory
requirements that may be in effect from time to time. Payment of principal and
interest to the Depositary is the responsibility of the Company or the
Trustee, disbursement of such payments to the owners of beneficial interests
in the Global Securities shall be the responsibility of the Depositary and
Direct and Indirect Participants.
Notes represented by a Global Security will be exchangeable for Notes in
definitive form of like tenor as such Global Security in denominations of
$1,000 and in any greater amount that is an integral multiple if the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if at any time the Depositary ceases to
be a clearing agency registered under applicable law and a successor
depositary is not appointed by the Company within 90 days or the Company in
its discretion at any time determines not to require all of the Notes of such
series to be represented by a Global Security and notifies the Trustee
thereof. Any Notes that are exchangeable pursuant to the preceding sentence
are exchangeable for Notes issuable in authorized denominations and registered
in such names as the Depositary shall direct. Subject to the foregoing, a
Global Security is not exchangeable, except for a Global Security or Global
Securities of the same aggregate denominations to be registered in the name of
the Depositary or its nominee.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Depositary continues to make its Same-Day
Funds Settlement System available to the Company, all payments of principal
and interest on the Notes will be made by the Company in immediately available
funds.
S-4
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Pricing Agreement
(which incorporates by reference the terms of the Underwriting Agreement), the
Company has agreed to sell to each of the Underwriters named below, severally,
and each of the Underwriters has severally agreed to purchase the principal
amount of the Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITERS NOTES
------------ ------------
<S> <C>
Morgan Stanley & Co. Incorporated........................... $ 50,000,000
CS First Boston Corporation................................. 50,000,000
Lehman Brothers Inc......................................... 50,000,000
J.P. Morgan Securities Inc. ................................ 50,000,000
------------
Total..................................................... $200,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligation of the Underwriters
to pay for and accept delivery of the Notes is subject to the approval of
certain legal matters by their counsel and to certain other conditions. Under
the terms and conditions of the Pricing Agreement, the Underwriters are
committed to take and pay for all of the Notes, if any are taken.
The Underwriters initially propose to offer the Notes in part directly to
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of .400% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to
exceed .250% of the principal amount of the Notes to certain brokers and
dealers. After the initial offering of the Notes, the offering price and other
selling terms may from time to time be varied by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company does not intend to apply for listing of the Notes on any
securities exchange. The Company has been advised by the Underwriters that the
Underwriters intend to make a market in the Notes but are not obligated to do
so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
In the ordinary course of their respective businesses, each of the
Underwriters and certain of their respective affiliates have individually
engaged, and may in the future engage, in investment banking and commercial
banking transactions with the Company and its affiliates.
S-5
<PAGE>
PROSPECTUS
COLUMBIA/HCA HEALTHCARE CORPORATION
DEBT SECURITIES
----------------
Columbia/HCA Healthcare Corporation (the "Company") may offer at any time,
or from time to time, its debt securities consisting of debentures, notes
and/or other unsecured evidences of indebtedness (the "Debt Securities") with
an aggregate initial offering price not to exceed $1,549,500,000. The Company
will offer the Debt Securities to the public on terms determined by market
conditions. The Debt Securities may be offered separately or together, in
separate series, in amounts, at prices and on terms to be determined at the
time of sale and to be set forth in supplements to this Prospectus. The Debt
Securities may be sold for U.S. dollars or one or more foreign or composite
currencies and the principal of, premium, if any, and interest, if any, on the
Debt Securities may likewise be payable in U.S. dollars or one or more foreign
or composite currencies.
The Debt Securities will be senior obligations of the Company, unsecured and
unsubordinated to any other existing indebtedness of the Company.
The terms of the Debt Securities, including where applicable the specific
designation, aggregate principal amount, denominations, maturity, rate (which
may be fixed or variable) and time of payment of interest, if any, purchase
price, any terms for mandatory redemption or redemption at the option of the
Company or the holder and any terms for sinking fund payments, the initial
public offering price, and the names of any underwriters or agents, the
principal amounts, if any, to be purchased by underwriters, the compensation,
if any, of such underwriters or agents and any other terms in connection with
the offering and sale of the Debt Securities in respect of which this
Prospectus is being delivered, will be set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement").
The Debt Securities may be issuable in registered definitive form
("Certificated Notes") or may be represented by one or more permanent global
securities ("Global Notes"), as specified in the applicable Prospectus
Supplement. Except in limited circumstances, owners of beneficial interests in
a Global Note will not be entitled to receive physical delivery of
Certificated Notes and will not be considered the holders thereof. See
"Description of the Debt Securities--Book-Entry System."
The Debt Securities may be sold to underwriters, to or through dealers,
acting as principals for their own account or acting as agents, or directly to
other purchasers. The Company may indemnify such underwriters, dealers and
agents against certain liabilities, including liabilities under the Securities
Act of 1933. See "Plan of Distribution."
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
This Prospectus may not be used to consummate sales of the Debt Securities
unless accompanied by a Prospectus Supplement.
November 17, 1995
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, therefore, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549; at its New York Regional Office, Seven World Trade Center, New
York, New York 10048; and at its Chicago Regional Office, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates, by writing to the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Such material
can also be inspected at the New York Stock Exchange, 20 Broad Street, New
York, New York 10005, on which the Company's Common Stock is listed.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments, supplements and exhibits thereto, the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
omits certain of the information set forth in the Registration Statement (in
accordance with the rules and regulations of the Commission), and reference is
hereby made to the Registration Statement and related exhibits for further
information with respect to the Company and the Debt Securities.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1994, as
amended (the "Form 10-K").
2. The portions of the Proxy Statement for the Annual Meeting of
Stockholders held June 8, 1995 that have been incorporated by
reference in the Form 10-K.
3. Quarterly Reports on Form 10-Q for the interim periods ended March
31, 1995, June 30, 1995, and September 30, 1995.
4. Current Reports on Form 8-K dated February 21, 1995 and April 24,
1995.
5. Registration Statement on Form 8-A dated August 31, 1993.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of this offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date
of filing of such reports and documents. Any statement set forth herein or in
a document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, will be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement set forth
herein or in a subsequently filed document deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO EACH PERSON TO WHOM A
PROSPECTUS AND PROSPECTUS SUPPLEMENT ARE DELIVERED, UPON WRITTEN OR ORAL
REQUEST, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED HEREIN
BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE THEREIN). REQUESTS FOR SUCH DOCUMENTS
SHOULD BE SUBMITTED IN WRITING TO JOHN M. FRANCK II, SECRETARY, COLUMBIA/HCA
HEALTHCARE CORPORATION, ONE PARK PLAZA, NASHVILLE, TENNESSEE 37203 OR BY
TELEPHONE AT (615) 340-5881.
2
<PAGE>
THE COMPANY
The Company is one of the largest health care services companies in the
United States. At September 30, 1995, the Company operated approximately 319
general, acute care and psychiatric hospitals in approximately 36 states and
two foreign countries. In addition, as part of its comprehensive health care
networks, the Company operates facilities that provide a broad range of
outpatient and ancillary services. At September 30, 1995, the Company operated
more than 100 outpatient centers.
The Company's primary objective is to provide to the markets it serves a
comprehensive array of quality health care services in the most cost-effective
manner possible. The Company's general, acute care hospitals typically provide
a full range of services commonly available in hospitals to accommodate such
medical specialties as internal medicine, general surgery, cardiology,
oncology, neurosurgery, orthopedics and obstetrics, as well as diagnostic and
emergency services. Outpatient and ancillary health care services are provided
by the Company's general, acute care hospitals as well as at freestanding
facilities operated by the Company, including outpatient surgery and
diagnostic centers, rehabilitation facilities, home health care agencies and
other facilities. In addition, the Company operates psychiatric hospitals
which generally provide a full range of mental health care services in
inpatient, partial hospitalization and outpatient settings.
The Company was formed in January 1990 as a Nevada corporation and
reincorporated in Delaware in September 1993. The Company's principal
executive offices are located at One Park Plaza, Nashville, Tennessee 37203,
and its telephone number at such address is (615) 327-9551.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of the Company's consolidated
earnings to fixed charges for the periods presented.
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, 1995
AND 1994 FOR THE YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
3.71x 3.99x 4.09x 3.33x 2.05x 1.47x 1.65x
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consists of income from continuing operations before minority
interests, income taxes and fixed charges. "Fixed charges" consists of
interest expense, debt amortization costs and one-third of rent expense, which
approximates the interest portion of rent expense.
Statements setting forth the computation of the ratio of earnings to fixed
charges for each of the five years ended December 31 and for the nine months
ended September 30, 1995 and 1994 are filed as exhibits to the Registration
Statement of which this Prospectus is a part.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities offered hereby will be
used for general corporate purposes, which may include, without limitation,
repayment of commercial paper and other indebtedness, additional
capitalization of the Company's subsidiaries and affiliates, capital
expenditures and possible acquisitions, unless a specific determination as to
the use of the proceeds is otherwise described in the accompanying Prospectus
Supplement.
3
<PAGE>
DESCRIPTION OF THE DEBT SECURITIES
The following description summarizes certain general terms and provisions of
the Debt Securities. The particular terms of the Debt Securities, including
the nature of any variations from the following general provisions, will be
described in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities, which will represent senior indebtedness of the
Company, may be issued in one or more series under an Indenture between the
Company and The First National Bank of Chicago, as Trustee (the "Trustee"),
dated as of December 15, 1993 (the "Indenture"). The Indenture has been filed
with the Commission as an exhibit to the Registration Statement and is
incorporated by reference herein.
The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all provisions of the Indenture, including the definition
therein of certain terms. All article and section references appearing herein
are to articles and sections of the Indenture. Unless otherwise defined
herein, all capitalized terms shall have the definitions set forth in the
Indenture.
GENERAL
Since the Company is a holding company, the rights of the Company to
participate in any distribution of assets of any subsidiary upon its
liquidation or reorganization or otherwise (and thus the ability of holders of
the Debt Securities to benefit from such distribution) are subject to the
prior claims of creditors of that subsidiary, except to the extent that the
Company may itself be a creditor with recognized claims against that
subsidiary. Claims on the Company's subsidiaries by creditors may include
claims of holders of indebtedness and claims of creditors in the ordinary
course of business. Such claims may increase or decrease, and additional
claims may be incurred in the future.
The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provides that Debt Securities may
be issued from time to time in series. The Debt Securities will be unsecured
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company. The Indenture limits the
ability of the Company and its Subsidiaries under certain circumstances to
secure Debt (as hereinafter defined) by mortgages on its Principal Properties
(as hereinafter defined), entering into Sale and Lease-Back Transactions or
issuing Subsidiary Debt or Preferred Stock as more fully described below.
The Prospectus Supplement will describe the following terms of the Debt
Securities being offered: (1) the title of the Debt Securities; (2) any limit
on the aggregate principal amount of the Debt Securities; (3) the date or
dates on which the Debt Securities may be issued and are or will be payable;
(4) the rate or rates per annum (which may be fixed or variable) at which the
Debt Securities will bear interest, if any, or the method by which such rate
or rates shall be determined, and the date or dates from which such interest,
if any, will accrue; (5) the date or dates on which such interest, if any, on
the Debt Securities will be payable and the Regular Record Dates for any such
Interest Payment Dates; and the extent to which, or the manner in which, any
interest payable on a global Debt Security ("Global Notes") on an Interest
Payment Date will be paid if other than in the manner described under "Book-
Entry System" below; (6) each office or agency where, subject to the terms of
the Indenture as described below under "Payment and Paying Agents," the
principal of, and premium, if any, and any interest on the Debt Securities
will be payable and each office or agency where, subject to the terms of the
Indenture as described below under "Denominations, Registration and Transfer,"
the Debt Securities may be presented for registration of transfer or exchange;
(7) the period or periods within which, the price or prices at which, and the
terms and conditions upon which the Debt Securities may be redeemed at the
option of the Company; (8) the obligation, if any, of the Company to redeem,
to repay or purchase the Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and
conditions upon which the Debt Securities will be redeemed, repaid or
purchased pursuant to any such obligation; (9) whether the Debt Securities are
to be issued with original issue discount within the meaning of Section
1273(a) of the Internal Revenue Code of 1986, as
4
<PAGE>
amended (the "Code"), and the regulations thereunder; (10) whether the Debt
Securities are to be issued in whole or in part in the form of one or more
Global Notes and, if so, the identity of the depositary, if any, for such
Global Note or Notes; (11) if other than Dollars, the Foreign Currency or
Currencies or Foreign Currency Units in which the principal of, and premium,
if any, and any interest on the Debt Securities shall or may be paid and, if
applicable, whether at the election of the Company and/or the Holder, and the
conditions and manner of determining the exchange rate or rates; (12) any
index used to determine the amount of payment of principal of and premium, if
any, and any interest on the Debt Securities; (13) any addition to, or
modification or deletion of, any Events of Default or covenants provided for
with respect to the Debt Securities; (14) any other detailed terms and
provisions of the Debt Securities which are not inconsistent with the
Indenture (Section 301). Any such Prospectus Supplement will also describe any
special provisions for the payment of additional amounts with respect to the
Debt Securities.
The Debt Securities may be issued as Discount Securities to be sold at a
substantial discount below their principal amount. "Discount Securities" means
any Debt Securities issued with original issue discount for purposes of the
Code. Special United States income tax and other considerations applicable to
Discount Securities will be described in the Prospectus Supplement relating
thereto. Discount Securities may provide for the declaration or acceleration
of the Maturity of an amount less than the principal amount thereof upon the
occurrence of an Event of Default and the continuation thereof (Sections 101,
502).
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities of a series may be issuable in whole or in part in the
form of one or more Global Notes, as described below under "Book-Entry
System." Unless otherwise provided in an applicable Prospectus Supplement with
respect to a series of Debt Securities, the Debt Securities will be issuable
in fully registered form and in denominations of $1,000 or any multiple
thereof. One or more Global Notes will be issued in a denomination or
aggregate denominations equal to the aggregate principal amount of Outstanding
Debt Securities of the series to be represented by such Global Note or Notes
(Sections 201, 301, 302, 304).
The Debt Securities of any series (other than a Global Note) will be
exchangeable for other Debt Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations.
The Debt Securities may be presented for exchange as provided above, and Debt
Securities (other than a Global Note) may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed), at the
office of the Security Registrar or co-Security Registrar designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without service charge and
upon payment of any taxes and other governmental charges as described in the
Indenture. Such transfer or exchange will be effected upon the Security
Registrar or co-Security Registrar being satisfied with the documents of title
and identity of the person making the request. The Company has appointed the
Trustee as Security Registrar (Section 305).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, and premium, if any, and any interest on the Debt Securities
will be made at the office of such Paying Agent or Paying Agents as the
Company may designate from time to time, except that at the option of the
Company payment of any interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer to an account maintained by the person
entitled thereto (Section 307). Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on the Debt
Securities will be made to the Person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
interest (Section 307).
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will act as the Company's sole Paying Agent through its principal
office in the Borough of Manhattan, The City of New York, with respect to the
Debt Securities. Any Paying Agents outside the United States and other Paying
Agents in the United States
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initially designated by the Company for the Debt Securities being offered will
be named in an applicable Prospectus Supplement. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts;
provided, however, the Company will be required to maintain a Paying Agent in
each Place of Payment for such series.
All moneys paid by the Company to the Trustee or a Paying Agent for the
payment of principal of, and premium, if any, and any interest on any Debt
Security which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to the
Company, and the Holder of such Debt Security may thereafter look only to the
Company for payment thereof (Section 1103).
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with or on behalf of a
depositary located in the United States (a "Depositary") identified in the
Prospectus Supplement relating to such series.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities that are to be represented by a Global Note to be deposited with or
on behalf of a Depositary will be represented by a Global Note registered in
the name of such Depositary or its nominee. Upon the issuance of a Global Note
in registered form, the Depositary for such Global Note will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Note to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Notes will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Notes will be shown on, and the
transfer of that ownership interest will be effected only through, records
maintained by the Depositary or its nominee for such Global Note. Ownership of
beneficial interests in Global Notes by persons that hold through participants
will be shown on, and the transfer of that ownership interest within such
participant will be effected only through, records maintained by such
participant. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests
in a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the
registered owner of such Global Note, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Note for all purposes under the
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Global Notes will not be entitled to have Debt
Securities of the series represented by such Global Note registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Note representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent or the Security
Registrar for such Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a Global Note for such Debt Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
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The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
permanent Global Note, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of such
Depositary. The Company also expects that payments by participants to owners
of beneficial interests in such Global Note held through such participants
will be governed by standing instructions and customary practices, as is now
the case with securities held for the accounts of customers registered in
"street name," and will be the responsibility of such participants.
A Global Note may not be transferred except as a whole by the Depositary for
such Global Note to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee
of such successor (Section 304). If a Depositary for Debt Securities of a
series is at any time unwilling or unable to continue as Depositary and a
successor Depositary is not appointed by the Company within 90 days, the
Company will issue Debt Securities in definitive registered form in exchange
for the Global Note or Notes representing such Debt Securities. In addition,
the Company may at any time and in its sole discretion determine not to have
any Debt Securities represented by one or more Global Notes and, in such
event, will issue Debt Securities in definitive registered form in exchange
for all the Global Notes representing such Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Note will be entitled
to physical delivery in definitive form of Debt Securities of the series
represented by such Global Note equal in principal amount to such beneficial
interest and to have such Debt Securities registered in its name.
LIMITATIONS ON THE COMPANY AND CERTAIN SUBSIDIARIES
Limitations on Mortgages
The Indenture provides that neither the Company nor any Subsidiary of the
Company will issue, assume or guarantee any notes, bonds, debentures or other
similar evidences of indebtedness for money borrowed ("Debt") secured by any
mortgages, liens, pledges or other encumbrances ("Mortgages") upon any
Principal Property (as hereinafter defined) without effectively providing that
the Debt Securities (together with, if the Company so determines, any other
indebtedness or obligation then existing or thereafter created ranking equally
with the Debt Securities) shall be secured equally and ratably with (or prior
to) such Debt so long as such Debt shall be so secured, except that this
restriction will not apply to: (1) Mortgages securing the purchase price or
cost of construction of property (or additions, substantial repairs,
alterations or substantial improvements thereto if the amount of such Debt
does not exceed the cost thereof), provided such Debt and the Mortgages are
incurred within 18 months of the acquisition or completion of construction and
full operation (or within 18 months of the completion of such repairs,
alterations or improvements); (2) Mortgages existing on property at the time
of its acquisition by the Company or a Subsidiary or on the property of a
corporation at the time of the acquisition of such corporation by the Company
or a Subsidiary (including acquisitions through merger or consolidation); (3)
Mortgages to secure Debt on which the interest payments are exempt from
federal income tax under Section 103 of the Code; (4) Mortgages in favor of
the Company or a Consolidated Subsidiary; (5) Mortgages existing on the date
of the Indenture; (6) certain Mortgages to governmental entities; (7)
Mortgages incurred in connection with the borrowing of funds if within 120
days such funds are used to repay Debt in the same principal amount secured by
other Mortgages on Principal Property with an independently appraised fair
market value at least equal to the appraised fair market value of the
Principal Property which secures the new Mortgage; (8) Mortgages incurred
within 90 days (or any longer period, not in excess of one year, as permitted
by law) after acquisition of the related Principal Property arising solely in
connection with the transfer of tax benefits in accordance with Section
168(f)(8) of the Code (or any similar provision adopted hereafter); and (9)
any extension, renewal or replacement of any Mortgage referred to in the
foregoing clauses (1) through (8) provided the amount secured is not increased
(Section 1105).
Limitations on Sale and Lease-Back
The Indenture provides that neither the Company nor any Subsidiary will
enter into any Sale and Lease-Back Transaction with respect to any Principal
Property with any person (other than the Company or a
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Subsidiary) unless either (i) the Company or such Subsidiary would be
entitled, pursuant to the provisions described in clauses (1) through (9)
under "Limitations on Mortgages" above, to incur Debt secured by a Mortgage on
the Principal Property to be leased without equally and ratably securing the
Debt Securities, or (ii) the Company during or immediately after the
expiration of 120 days after the effective date of such transaction applies to
the voluntary retirement of its Funded Debt and/or the acquisition or
construction of Principal Property an amount equal to the greater of the net
proceeds of the sale of the property leased in such transaction or the fair
value in the opinion of the chief financial officer of the Company of the
leased property at the time such transaction was entered into, in each case
net of the principal amount of all debt securities delivered under the
Indenture, including the Debt Securities (Section 1106).
Limitations on Subsidiary Debt and Preferred Stock
The Indenture provides that the Company may not permit any Restricted
Subsidiary (which term includes most of the Company's existing Subsidiaries)
to, directly or indirectly, create, incur, issue, assume or otherwise become
liable with respect to, extend the maturity of or become responsible for the
payment of, as applicable, any Debt or Preferred Stock other than (1) Debt
outstanding on the date of the Indenture; (2) Debt of a Restricted Subsidiary
which represents the assumption by such Restricted Subsidiary of Debt of
another Restricted Subsidiary; (3) Debt or Preferred Stock of any corporation
or partnership existing at the time such corporation or partnership becomes a
Subsidiary; (4) Debt of a Restricted Subsidiary arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations or from guarantees, letters of credit, surety bonds or performance
bonds securing any obligations of the Company or any of its Subsidiaries
incurred or assumed in connection with the disposition of any business,
property or Subsidiary, other than guarantees or similar credit support by any
Restricted Subsidiary of indebtedness incurred by any Person acquiring all or
any portion of such business, property or Subsidiary for the purpose of
financing such acquisition; (5) Debt of a Restricted Subsidiary in respect of
performance, surety and other similar bonds, bankers acceptances and letters
of credit provided by such Restricted Subsidiary in the ordinary course of
business; (6) Debt secured by a Mortgage incurred to finance the purchase
price or cost of construction of property (or additions, substantial repairs,
alterations or substantial improvements thereto), provided that (A) such
Mortgage and the Debt secured thereby are incurred within 18 months of the
later of such acquisition or completion of construction (or such addition,
repair, alteration or improvement) and full operation thereof and (B) such
Mortgage does not relate to any property other than the property so purchased
or constructed (or added, repaired, altered or improved); (7) Permitted
Subsidiary Refinancing Debt (as defined in the Indenture); (8) Debt (including
without limitation, Debt arising from a guarantee) of a Restricted Subsidiary
to the Company or another Subsidiary, but only for so long as held or owned by
the Company or another Subsidiary; or (9) any obligation pursuant to a Sale
and Lease-Back Transaction permitted pursuant to the provisions described
under "Limitations on Sale and Lease-Back" above (Section 1107).
Notwithstanding the foregoing, the Company and any one or more Subsidiaries,
including Restricted Subsidiaries, may, without securing the Debt Securities,
issue, assume or guarantee Debt or Preferred Stock or enter into any Sale and
Lease-Back Transaction that would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with all other
such Debt or Preferred Stock of the Company and its Subsidiaries (not
including Debt or Preferred Stock permitted pursuant to the foregoing
paragraphs) and the aggregate Attributable Debt (as defined below) in respect
of Sale and Lease-Back Transactions does not exceed 15% of Consolidated Net
Tangible Assets (as hereinafter defined) of the Company and its Consolidated
Subsidiaries (Section 1108).
The term Principal Property is defined to mean each acute-care hospital
providing general medical and surgical services (excluding equipment, personal
property and hospitals that primarily provide specialty medical services, such
as psychiatric and obstetrical and gynecological services) owned solely by the
Company and/or one or more of its Subsidiaries and located in the United
States. The term Consolidated Net Tangible Assets is defined to mean the total
amount of assets (less applicable reserves and other properly deductible
items) after deducting therefrom (i) all current liabilities as disclosed on
the consolidated balance sheet of the Company
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(excluding any thereof that are by their terms extendible or renewable at the
option of the obligor thereon to a time more than 12 months after the time as
of which the amount thereof is being computed and excluding any deferred
income taxes that are included in current liabilities), and (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangible assets, all as set forth on the most recent consolidated
balance sheet of the Company and computed in accordance with generally
accepted accounting principles. The term Attributable Debt is defined to mean
(i) as to any capitalized lease obligations, the Debt carried on the balance
sheet in accordance with generally accepted accounting principles, and (ii) as
to any operating leases, the total net minimum rent required to be paid under
such leases during the remaining term thereof discounted at the rate of 1% per
annum over the weighted average yield to maturity of all debt securities
issued and outstanding under the Indenture, including any outstanding Debt
Securities, compounded semi-annually (Section 101).
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to the
Debt Securities of any series: (a) failure to pay principal of or any premium
on any Debt Security of that series when due; (b) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days; (c)
failure to deposit any sinking fund payment in respect of any Debt Security of
that series when due; (d) failure to perform any other covenant of the Company
in the Indenture (other than a covenant included in the Indenture solely for
the benefit of a series of Debt Securities other than the series), continued
for 60 days after written notice as provided in the Indenture; (e) certain
events in bankruptcy, insolvency or reorganization; and (f) any other Event of
Default provided with respect to Debt Securities of that series (Section 501).
If any Event of Default with respect to Debt Securities of any series at any
time Outstanding occurs and is continuing, either the Trustee or the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Debt Securities of that series to be due and payable immediately. At any time
after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on acceleration
has been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration (Section 502).
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity (Section 603). Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Debt Securities of that
series (Section 512).
The Company is required to furnish the Trustee annually with a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 1109).
MODIFICATION AND WAIVER
Modifications of and amendments to the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of interest, if any, on, any Debt
Security, (b) reduce the principal amount of, or any premium or interest on,
any Debt Security, (c) reduce the
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amount of principal of Discount Securities payable upon acceleration of the
maturity thereof, (d) change the currency of payment of principal of, or any
premium or interest on, any Debt Security, (e) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt
Security, or (f) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults (Section
1002).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all Holders of Debt
Securities of that series, waive any past default under the Indenture with
respect to Debt Securities of that series, except a default in the payment of
principal or any premium or interest or a covenant or provision that cannot be
modified or amended without the consent of the Holders of each Outstanding
Debt Security affected thereby (Section 513).
CONSOLIDATION, MERGER, SALE OR LEASE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to any corporation
organized under the laws of any domestic jurisdiction, provided that the
successor corporation assumes the Company's obligations on the Debt Securities
and under the Indenture, that immediately after giving effect to the
transactions no Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have occurred and be
continuing, and that certain other conditions are met (Section 901).
DEFEASANCE
If so specified in the Prospectus Supplement with respect to the Debt
Securities of any series, the Company, at its option, (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, replace stolen, lost or mutilated Debt Securities
of such series, maintain paying agencies and hold moneys for payment in trust)
or (ii) will not be subject to provisions of the Indenture concerning
limitations upon Mortgages, Subsidiary Debt and Preferred Stock, Sale and
Leaseback Transactions, and consolidations, mergers and sales of assets, in
each case if the Company deposits with the Trustee, in trust, money or U.S.
Government Obligations (as defined) which through the payment of interest
thereon and principal thereof in accordance with their terms will provide
money in an amount sufficient to pay all the principal, premium, if any, and
interest on the Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Debt Securities. To exercise any such
option, the Company is required, among other things, to deliver to the Trustee
an opinion of counsel to the effect that (1) the deposit and related
defeasance would not cause the Holders of the Debt Securities of such series
to recognize income, gain or loss for United States income tax purposes and
(2) if the Debt Securities of such series are then listed on any national
securities exchange, such Debt Securities would not be delisted from such
exchange as a result of the exercise of such option (Article Fourteen).
NOTICES
Notices to Holders will be given by mail to the addresses of such Holders as
they appear in the Security Register (Sections 101, 105).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York (Section 111).
CONCERNING THE TRUSTEE
The Trustee has normal banking relationships with the Company.
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PLAN OF DISTRIBUTION
GENERAL
The Company may sell Debt Securities to or through underwriters or a group
of underwriters, directly to other purchasers, or through dealers or agents.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Each Prospectus Supplement
will describe the method of distribution, and time and place of delivery, of
the offered Debt Securities. The Company also may, from time to time,
authorize dealers, acting as the Company's agents, to solicit offers to
purchase the offered Debt Securities upon the terms and conditions set forth
in any Prospectus Supplement.
In connection with the sale of Debt Securities, underwriters, dealers or
agents may receive compensation from the Company or from purchasers of Debt
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be "underwriters," and
any discounts or commissions received by them and any profit on the resale of
Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter, dealer or agent
will be identified, and any such compensation will be described, in the
Prospectus Supplement relating to the offered Debt Securities.
Under agreements that may be entered into by the Company, underwriters,
dealers and agents that participate in the distribution of Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Each issuance of a series of Debt Securities will constitute a new issue of
securities with no established trading market. In the event that Debt
Securities of a series offered hereunder are not listed on a national
securities exchange, certain broker-dealers may make a market in the Debt
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given that any broker-
dealer will make a market in the Debt Securities of any series or as to the
liquidity of the trading market for such Debt Securities.
DELAYED DELIVERY ARRANGEMENT
If so indicated in the Prospectus Supplement relating to offered Debt
Securities, the Company will authorize dealers or other persons acting as the
Company's agents to solicit offers by certain institutions to purchase Debt
Securities from the Company pursuant to contracts providing for payment and
delivery on a future date. Institutions with which such contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but
in all cases such institutions must be approved by the Company. The
obligations of any purchaser under any such contract will be subject to the
condition that the purchase of Debt Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The dealers and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
LEGAL OPINIONS
Certain matters with respect to the validity of the Debt Securities offered
hereby will be passed upon for the Company by Stephen T. Braun, Senior Vice
President and General Counsel of the Company, and for any underwriters,
dealers or agents, as the case may be, by Jenkens & Gilchrist, a Professional
Corporation, Dallas, Texas. Jenkens & Gilchrist, a Professional Corporation,
has rendered, and continues to render, certain legal services to the Company.
As of September 30, 1995, Mr. Braun owned approximately 2,329 shares and had
options to purchase 134,500 shares of the Company's Common Stock.
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EXPERTS
The consolidated financial statements and financial statement schedules of
the Company, incorporated herein by reference in this Prospectus, have been
audited by Ernst & Young LLP, independent auditors, to the extent and for the
periods indicated in their reports thereon. Such consolidated financial
statements and financial statement schedules are incorporated herein by
reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
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